Record Inflow Fuels Price Speculation for Dogecoin Amid Supply Concerns

The demand for Dogecoin through exchange-traded products has reached a record high, with a net influx of $2.89 million in the week to September 25. This surpasses the previous high of $2.59 million set in January and marks a significant milestone for the cryptocurrency. However, this influx is largely concentrated in one fund: the Grayscale Dogecoin Trust holds approximately $13.87 million, accounting for around 81% of the combined assets of all American DOGE funds.

This concentration raises questions about the supply side of the market. Unlike Bitcoin's, Dogecoin's supply does not tighten, with a fixed block reward of 10,000 DOGE per block producing around 14.4 million new coins daily. This translates to roughly $1.38 million in new supply each day, which could impact price predictions.

Meanwhile, the German exchange-based route for Dogecoin is offered through an ETP or ETN, which carries a physical backing and annual management fee of 2.50%. The assets under management stand at around $10.7 million, with custody handled by BitGo Europe GmbH.